Back on the Radar: Lyons Consulting Group

"Back on the Radar" is a weekly post exploring the challenges, successes, growth trajectories, innovations and value creation of Chicago's second-stage companies — firms that are "too big to be small but too small to be big" yet represent a major driver of employment and wealth creation in the local economy.

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By Raman Chadha

Lyons Consulting Group (LyonsCG) was bootstrapped in 2003 by Rich Lyons and Dave Barr, with a focus on information technology consulting. The firm doubled in 2010, with revenue approaching $10 million as it completed a shift toward e-commerce development. It expects to double again this year, aggressively hiring IT and sales talent for its Chicago headquarters and a new office in Rockford.

Rich Lyons, president, has attributes common to many successful entrepreneurs: focus, tenacity, opportunity recognition and goal-orientation.

His hero is Eric Liddell, the runner in the movie "Chariots of Fire." Like Liddell, who was knocked down in a race but still won, Rich believes in having the “determination to get up after being knocked down, using your God-given talents to maximize your potential. No one can stop us to reach our limits except ourselves. I love that challenge as a business owner and employer.”

It’s that determination that helped LyonsCG survive the recession, during which it experienced a typical story – from steady growth to a sudden need for cuts. “To let someone go strictly because of market conditions – not because of their performance – is among the worst things I’ve had to do,” Rich explains.

As a typical IT consulting firm that was project-based, LyonsCG “never had any recurring revenue,” Rich said. “We were on the expense side, and our kinds of projects got cut” in late 2008 and 2009.

To survive and become more resilient, the company re-invented its business model to focus on e-commerce development. “We saw a burgeoning market with brands that weren’t being sold online. We saw an opportunity to shift to the revenue side of the conversation where the CEO or director of marketing is saying, ‘I need to generate revenue and I need to do it now.’” Today, the company builds e-commerce technology for clients like Warner Bros., Maui Jim sunglasses and Oneida.

Because of the recurring revenue stream, “this is the first year with over $1 million of revenue we know we’ll book,” says Rich. Add to that the trend of firms increasingly investing in digital commerce, and the company sees tremendous promise. “The paradigm is shifting and broadening. Companies want to do pop-up stores, allow customers to find products on phones and use their e-commerce platform as their point-of-sale system.”

The company’s goal is to reach $50 million in sales by 2016 through organic growth, acquisitions and new market expansion. Rich knows that such growth brings challenges – scaling delivery to keep up with sales, finding experienced people and maintaining the firm’s culture, which he describes as “collaborative, collegial and customer-focused.”

In addition to changing its business model, the company has become totally focused on customers, putting its money where its proverbial mouth is. “We unconditionally guarantee our work. If our customer isn’t satisfied, we give them their money back.”

To lower the likelihood of that happening, LyonsCG looks for “people who are committed to the customer experience (and) the long-term relationships we build with customers,” says Rich, explaining a major driver behind the recurring revenue model, as well as a major driver of his own joy.

“I love the fact that we have a collaborative culture where we might argue vehemently but leave with an agreement of what is best for the customer.”

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Raman Chadha is the executive director and clinical professor of DePaul University’s Coleman Entrepreneurship Center, an extension of DePaul’s academic program in entrepreneurship. In the community, the Center helps owners of second-stage businesses through peer-to-peer educational programs and roundtables. On campus, the Center helps students launch and grow their own ventures through a virtual incubator and an annual new venture competition.

Follow Mr. Chadha on Twitter: @RamanChadha. Look for his insights on second-stage companies every Friday on Enterprise City, Crain's blog for Chicago entrepreneurs.